Panamanian President Juan Carlos Varela announced late Monday his Central American country would switch diplomatic ties from Taiwan to China, a move analysts said is a major success to Beijing in its drive to isolate the self-governing island it claims as its own territory.

In a televised address on Monday Varela said Panama, which has strategic significance to China, was upgrading its commercial ties with Beijing and establishing full diplomatic links with the second most important customer of its key shipping canal. "I'm convinced that this is the correct path for our country," he said.

Panama’s sudden break in relations with Taiwan has hardened the Asian government’s defiance against China, which it suspects of engineering the move, with no signs of Taipei meeting Beijing’s longer-term demands. Taiwan reacted by severing formal ties with Panama and all aid.

Taiwan’s government vented toward China as well as Panama, which announced the cut in diplomatic relations after recognizing Taiwan’s government for more than a century. Taiwan warned China against inflaming ill will in Taiwan.

China keeps pressure on

“Mainland China’s suppression of our country’s international space, interference in our international participation and temptation of our allies to break ties are all still present and have not eased,” said Chiu Chui-cheng, spokesman for the Taiwan government’s Mainland Affairs Council.

“We would like to severely warn mainland China here against pushing, step-by-step, cross-Strait relations to a dangerous brink from which it cannot turn back,” he said.

China, supported by a $11.2 trillion economy and more than 170 diplomatic allies, has taken a series of measures over the past year to pressure Taiwan President Tsai Ing-wen into negotiations with a pre-condition that each side see itself as part of one country.

FILE - In this Dec. 2, 2016 photo released by Taiwan Presidential Office, Dec. 3, 2016, Taiwan's President Tsai Ing-wen speaks with U.S. President-elect Donald Trump through a speaker phone in Taipei, Taiwan.

Taiwan citizens like their democracy

Most Taiwanese prefer their democratic self-rule to a tie-up with China, opinion polls have found.

“I think mostly we are getting tired of Taiwan being isolated,” said Shane Lee, political scientist at Chang Jung Christian University in Taiwan, referring to the erosion of diplomatic relations. “We have to tell China you cannot threaten Taiwan’s existence forever. You have to let people live.”

Tsai rejects China’s conditions for dialogue and officials in Taipei believe Beijing has retaliated by forming ties with former Taiwan ally Sao Tome and Principe in December. Also that month China passed an aircraft carrier near Taiwan’s coastlines. Last month, Beijing blocked Taipei from observing the World Health Organization’s annual assembly.

China leaves door ajar

But analysts said China just wants to warn Taiwan without fanning outrage and while holding a door open in case Tsai shifts to a Beijing-friendlier policy. An enraged Taiwanese public is seen as more likely to elect people who take a tougher stand against Beijing.

China will use caution in paring down Taiwan’s remaining 20 diplomatic allies, which are mostly poor countries in Africa, Central America, the Caribbean and the South Pacific, said Alex Chiang, international relations professor at National Chengchi University in Taipei.

“I think China will be selective because they don’t want to embarrass Taiwan, so I think they will only try to go slowly and also give time to Taiwan to react,” Chiang said. “China still has some hope to have a friendly relationship with Taiwan, but if you push too hard, if our diplomatic ties (go) down to five or six, then it’s going to be very difficult for Taiwan.”

Taiwan will survive

Taiwan can get by on fewer than 10 allies if needed, political scientists have said. The Taipei government looks to them largely for a voice in the United Nations, which Taiwan left in 1971 when the global organization admitted China.

Taiwan maintains strong informal relations with Japan and the United States, as well. Both may help Taiwan in a deeper diplomatic crisis, Lee said.

Taiwan offers development aid to its allies and before 2008 it would vie with China to give higher sums of money to make allies switch sides.

Under former Taiwanese president Ma Ying-jeou, no allies switched sides, but three other Latin American and Caribbean countries expressed interest in formalizing relations with China and may now be able to do that, Chiang said.

Panama’s decision follows several years of private discussions between Chinese and Panamanian leaders.

China is the second biggest investor in the Panama Canal, the chief marine shipping link between the Atlantic and Pacific oceans, after the United States, reported the Latin American news website El Universo. Over the past fiscal year, China sent 38 million tons of cargo, or 19 percent of the total, through the canal, it said.

FILE - A floating gate is opening to the Chinese COSCO container vessel named Andronikos navigating through the Agua Clara locks during the first ceremonial pass through the newly expanded Panama Canal in Agua Clara, on the outskirts of Colon City, Panama, June 26, 2016.

In June last year Tsai visited Panama to improve ties. She attended a ceremony for the a Panama Canal expansion and saw Taiwan donate 3,000 boxes of flu medicine to fight an epidemic according to the Taipei-based Central News Agency.

China’s Foreign Ministry said on its website Tuesday that Panama had agreed to recognize only Beijing as the government of China.

Panama’s president "for business interests went along with the authorities in Beijing by making a diplomatic switch,” Taiwan’s ministry said in a statement. “This is an extremely unfriendly act and the last time [Taiwan] will be cheated.”